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Why Sports Fans are Cutting the Cord and What it Means for Advertisers

March 11, 2020 | Article written by Mark Kaefer

Guest post by Mark Kaefer

Mark Kaefer is Senior Director, Marketing at RhythmOne and has been with the company since 2010. A digital media, B2B, and technology marketing veteran, he has held marketing management and communications positions at Experience Inc., SkillSoft, and TechTarget. Mark holds a B.S. degree in Television/Radio from Ithaca College and an M.S. degree in Mass Communication from Boston University.

Once upon a time, sports fans simply couldn’t cut the cord. Whether professional or collegiate, real-time access to a favorite team usually meant a pricey cable bundle.

With a bevy of streaming options, today’s sports fans can watch and engage with more content for less money than ever before. More importantly, marketers potentially have a lucrative opportunity to reach these sports fans in new — and more effective — ways. To this end, and as a key partner in the success of the CTV/OTT ecosystem, we have put together this blog post to help buyers better understand the market landscape and options for engaging consumers in an omnichannel world.

The Shift to Streaming

Cable and satellite are on the downswing, with eMarketer estimating that US pay TV households will decline from 86.5 million to 72.7 million between 2019 and 2023. As promotional pricing ends and costs rise, viewers are no longer willing to pay for costly packages, according to analysts, especially when so many streaming options exist.

But it’s not just cost that’s driving the move to streaming; it’s an entire cultural shift where viewers demand the type of personalized experience that streaming services are able to provide. Eighty percent of what Netflix customers watch comes from their personalized recommendations, and 96% of broadcasters have become aware of the demand for more personalized service.

Expectations from viewers also rise with smartphone penetration now reaching nearly 73%. Viewers expect to watch what they want anytime, anywhere, and OTT services can help deliver.

Media Rights Follow Suit

Traditional networks have long held the media rights to major league sports, but several contracts expire soon — 2021 for the MLB and NFL, 2022 for the NHL, and 2025 for the NBA. DirecTV is currently paying a whopping $1.5 billion annually for rights to the NFL Sunday Ticket, but the cord-cutting phenomenon has the company rethinking the high cost.

Sports rights owners and distributors are seeing the shift among consumers, and they likely won’t be sitting on the sidelines. The leagues have been reluctant to sell rights to tech, but some limited partnerships suggest that the tide may be changing: Facebook acquired the exclusive rights to 25 MLB games in 2018, and Amazon is now streaming Thursday night football games on its gaming platform, Twitch.

Where to Reach Live Sport Streamers

In the meantime, with the question of future media rights up in the air, viewers can still catch a whole host of games over OTT. In fact, last year marked the first time that NCAA basketball fans could cobble together viewing for the entirety of March Madness without cable, marking a major milestone in sports streaming.

Several OTT and CTV providers have launched live sports offerings within the last few years.

FuboTV is carving out its own niche in the OTT market by specializing in live sports and news. The publisher launched in 2015 with mostly soccer content but has since majorly expanded its offerings to include Turner networks and local CBS stations. Now, FuboTV’s monthly active users watch upwards of 144 hours of video over CTV and stream more than 20 channels. That’s in comparison to traditional pay-TV subscribers who stream 12 channels per month.

Flosports has emerged as another successful niche streamer, providing access to less publicized sports like wrestling, track, and softball. Since its launch in 2006, Flosports has acquired the streaming rights to more than 4,000 events across 25 sports, and it recently signed a deal with the NCAA’s Colonial Athletic Conference to broadcast more than 300 live events, including collegiate football and basketball.

In addition to OTT providers, traditional publishers are offering their own streaming services, like CBS All Access and ESPN+. Between all of these options, sports fans have more or less every national game covered, and many regional, without so much as a cable box.

The Marketing Opportunity

According to a 2019 eMarketer report, worldwide revenues from sports digital media are projected to grow by 11.5% in the next three to five years, faster than any other business area. Traditional TV rights, on the other hand, will see the slowest growth at 3.2%.

That’s very good news considering the receptivity of streaming ads: The IAB found that two-thirds of OTT video viewers don’t mind ads, and half of viewers even enjoy interacting with these ads. CTV ads also enjoy an unprecedented 97% completion rate, according to Extreme Research.

This article contains forward-looking statements. In some cases, you can identify forward-looking statements by the words “may,” “will,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. All statements other than statements of historical fact are statements that could be forward-looking statements, including, but not limited to, statements about the potential and effectiveness of OTT advertising. These forward-looking statements are subject to risks and uncertainties, assumptions and other factors that could cause actual results and the timing of events to differ materially from future results that are expressed or implied in the forward-looking statements. Factors that could cause or contribute to such differences include the dynamic and rapidly evolving sector, as well as the highly competitive industry that RhythmOne operates in, which make it difficult to evaluate prospects. These and other risk factors are discussed in Tremor International Ltd’s Annual Report for the period ended December 31, 2018. The forward-looking statements in this press release are based on information available to RhythmOne as of the date hereof, and we assume no obligation to update any forward-looking statements.